Reverting to high growth, managing inflation and insulating India from adverse global economic situation are the major challenges before the country, Finance Minister Pranab Mukherjee said on Friday.
"There are three major areas of concern for Indian Economy. How to come back to higher growth trajectory (and) at the same time maintaining inflation pressure at tolerable level and also ensure to extent possible to insulate adverse impact emerging in other parts of world," he told reporters outside the North Block.
Mukherjee's comments come on a day the government's Mid-Year Analysis, tabled in Parliament, lowered the country's GDP growth forecast for this fiscal to 7.5 per cent (plus\minus 0.25 per cent) from the earlier projection of about 9 per cent.
India had recorded GDP growth of 9 per cent between 2004-05 to 2007-08, but the expansion slipped to 6.7 per cent, 8 per cent and 8.5
per cent, in the following three fiscals.
GDP in the first half of the current fiscal has fallen to 7.3 per cent against 8.6 per cent year-on-year. Even though inflation has shown some moderation in the recent months, the review expressed concern over slow pace of moderation in the rate of overall price rise. The government expects the year-end inflation to be around 7 per cent.
The Financial Stability and Development Council (FSDC) yesterday discussed steps to protect India from possible systemic risks in wake of the prevailing global economic scenario.
The crisis in smaller European countries like Greece, Portugal and Spain is likely to have implications for the rest of the world, including India although the country's financial sector has no crucial links with these countries.